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2. Manufacture or production of computer software also includes customization of a software which requires development of software programme. 'Manufacture' is explained in Section 10B in Expln. (iii) in an inclusive manner. According to Clause (c) of the said Explanation, manufacture includes recording of programmes on any disc, tape, perforated media or other information storage device. Likewise the word 'produce' is explained in Expln. (iv) to include production of computer programmes.
3. Activities carried on by assessee-company to provide services to 'CIC' consisted of two parts. The first part is importing of SAP software. The second part is customization of above software and rewriting the same to make it compatible with clients' specific applications.
4. SAP software imported by the assessee-company is a very elaborate system which helps running almost all the activities of an organization like enterprise management, customer relationship, product design and engineering, planning, component procurement, manufacturing, sales and distribution, HR development, finance and accounting, etc. The software is owned by SAP Ag which is a German company.
5. Assessee-company appointed highly qualified people and impart them specialized training on SAP software through a pre-defined curriculum. Assessee-company develops, modifies, rectifies and customizes the software for various projects of the clients. Those developments are stored as projects and presentations by the company. It is after the training and improving their skills that they are deputed to foreign sites specified by the clients.
7. Another decision relied on by the assessee-company is the decision of ISBC Consultancy Services Ltd. (supra) by Tribunal Mumbai Bench 'C'. In that case, a standard software produced by a foreign party who sold to its customers and in order to deploy the same for specific end use of individual customers, the software had to undergo a qualitative change through the process of customization. The term 'customization' has been understood in the sense that the original standard software is modified and such modification resulted in a new programme produced by the assessee. It amounted to creation of a new programme, the above decision also did not consider the issue of export while deciding the case which is very relevant in the present case.

3. Prior to 1st April, 1999, Expln. (b) to Section 80HHE of the Act defined computer software as "any computer programme recorded on any disc, tape, perforated media or other information storage device and includes such programme which is transmitted from India to a place outside India by any means". This was amended by Finance (No. 2) Act, 1998 w.e.f. 1st April, 1999 by which after the words 'any such programme' and before words "which is transmitted from India" the words 'any customized electronic data was inserted'. Clearly, even assuming that assessees were customizing software received from CIC and Unisys prior to 1st April, 1999, no deduction under Section 80HHE would be available and such deduction could only be availed off subsequent to 1st April, 1999.